Establishing US assembly lines would be 'highly difficult' for Apple

Though Apple Chief Executive Tim Cook said this week he'd like his company's products to be made in the U.S., a new report suggests the roadblocks might be too great for Apple to overcome, at least in the short term.

Unnamed sources in Apple's upstream supply chain indicated toDigiTimes that moving production lines of Apple products to the U.S. would be a "highly difficult" task for the company in the near future. Almost all of Apple's products are currently assembled in Asia before they are shipped to the rest of the world.

Even if Apple did decide to conduct assembly in America, the cost to transport components would likely be too high for Apple to bear, the report said. And higher wage rates in the U.S. would also increase costs for Apple.

"Since moving a supply chain from one place to another takes time, while enterprises are mainly concerned about costs, if there is no profitability in moving, the related upstream component makers are unlikely to follow Apple in moving to the U.S.," the report said.

Almost all of the components Apple utilizes in its products are built in China, proximity to those component suppliers provides more than just cost savings. The New York Times noted in a profile on Apple's supply chain in January that there are a plethora of highly skilled workers, which offers "breathtaking" speed and flexibility that could not be matched by an American plant.

Cook was asked about the prospect of building Apple products in America during an interview at the D10 conference earlier this week, where AppleInsider was in attendance. Cook said he would like for Apple to begin building products in America as it once did.

Apple CEO Tim Cook tours an iPhone production line at a Foxconn plant in Zhengzhou, China, in March.

Cook did note that the custom-made ARM processors for the iPhone and iPad are built in the U.S., in Austin Texas, while Corning's Gorilla Glass used on the iPhone is made in Kentucky.

"There's an intense focus on the final assembly. Could that be done in the U.S.? I sure hope so," Cook said. "But look, how many tool-and-die makers do you know in America? I could ask them, nationwide, to come here tonight and we couldn't fill [a few hundred seats in] this room."

While most of Apple's assembly remains in Asia, a limited number of devices have been produced by the company through its manufacturing partner, Foxconn, in Brazil. The Brazilian government granted Foxconn a series of tax breaks to incentivize production of devices like the iPhone and iPad in their country. So far, devices built in Brazil have only been sold by Apple in that country.

Establishing US assembly lines would be 'highly difficult' for any company, regardless of industry

... Right?

I don't see Apple doing US assembly until it can be done completely by robots with humans simply loading and unloading completed products and components, respectively. Hire humans to oversee the lines and repair the robots. Plant powered by solar and biogas.

But that's multiple decades off. So far off that it's impossible to actually envision.

Quote:

Originally Posted by jd_in_sb
The U.S. needs to create an industrial zone exempt from minimum wage laws...

I don't see Apple doing US assembly until it can be done completely by robots with humans simply loading and unloading completed products and components, respectively. Hire humans to oversee the lines and repair the robots. Plant powered by solar and biogas.

As has been explained previously, that only addresses a very small part of the problem. That does absolutely nothing about tax laws, environmental, health and safety laws, infrastructure, etc.

Cook did note that the custom-made ARM processors for the iPhone and iPad are built in the U.S., in Austin Texas, while Corning's Gorilla Glass used on the iPhone is made in Kentucky.

Sadly, even that isn't 100% true. Like Intel, who make the majority of their high end silicon in fabs in the US, the finished wafers are shipped off to Asia for sawing, bonding and packaging, so the first time there is a completely finished chip, it's in Asia.

I just can't see this happening at any point. Transportation of all the stuff they need to the US would be incredibly expensive.

no way that this will happen for reason stated in the Article and that IMO a 10 Billion dollar investment would be required... with no payback on the Horizon...
while American's are "patriotic" they also want to "live free" not as in freedom, but as in free and cheap products...
thus there are very few americans outside of those that are in the military, that would pay an extra 100 dollars for an iPhone. (if you want to gauge how many people would be buying the iPhone look up the number of people that bought it at full price when it was first introduced, the first generation iPhone, meaning no subsidies!..). and even if they were made in the US they would still be made in China, thus people would import from China for cheaper iPhone.

also (unions, gov) they could block the components being shipped to the US they could cause a strike at the Apple plants ; leakage of secret information All these things would prevent the phone from being sold in the US.

the late Steve Jobs was correct when he said " those jobs are gone and never coming back "

instead of Apple making the first American made phone why don't we have Google or Motorola or Nokia or Samsung make the first American made phone and let them pave the way to see if Americans will actually buy an American phone over the Chinese made phone.

TL;DR...if everybody wants an American-made phone ...then lets get the other phone companies making an American phone and if it takes off...then Apple will follow suit and make their own manufacturing plant in the US... it is a Win-Win situation for america!...

Does anyone know the rule regarding which location gets used in 'Made in xxxx'? Is there a certain percentage of assembly/production that needs to occur in a certain location? I wonder if simply applying the back panel (thus, final assembly), for example, here in California would allow Apple to print 'Designed and Made in California' on the back?

There'd definitely be a certain cachet in that. Maybe a 'California' line with palm trees on the back panel and arugula in the box.

I wish you guys who keep dreaming about it, stop dreaming of the return of low value added, low wage, low tech assembly jobs to the U.S. iPhone and iPad assembly, unless it is completely automated as one poster said, will never ever come back to the United States. The productivity of a single worker in such an operation just is not going to be enough to justify paying him or her a living wage. Anyone who seeks the return of those types of assembly jobs is in effect wishing that we become a third world country.

This is not to say that we don't need more manufacturing jobs over here. We do, but not mass component assembly.